RECOMMENDED - T H A T the references be noted and considered jointly with the reports at agenda items 6 and 7.

673 INITIAL CAPITAL PROGRAMME PROPOSALS 2012/13 (DEER) -

The Cabinet reference and the report were considered by the Committee with it being noted that the initial proposals were presented to the Committee for consideration and that any recommendations were to be referred to the Corporate Resources Scrutiny Committee by no later than 20th December 2011. The final budget proposals were scheduled to be presented to Cabinet by no later than 29th February, 2012 with submission to Council by no later than 7th March 2012.

The Head of Accountancy and Resource Management presented the report advising that Appendix A to the report detailed the financial progress on the Capital Programme as at 30th September 2011. The report also noted that with regard to the Barry Waterfront Park and Ride Additional Design, an additional grant sum of £46,000 for the scheme had been agreed by SEWTA to cover additional costs on the main contract sum and design and management fees due to additional works required on drainage, redesigning following the planning procedure and ecology related fees. The Authority had also received grant funding of £74,792 to provide support for capital initiatives to achieve increased waste prevention and improve recycling initiatives under the Regional Capital Access fund. It was intended that the capital funding would be used for a new recycling vehicle and the procurement process was being progressed by the Council’s Fleet Management Section. Although tenders had not yet been received, it was anticipated that the vehicle would cost slightly more than the available grant and, as such, a contribution from revenue budgets of up to £30,000 would be needed. Cabinet had also previously agreed that further information would be provided where schemes had a value of over £500,000 and showed a variance of 20% or more between actual spend and the profile. It was noted that the following schemes had met this criteria:

Llanmaes Flood Risk Management - Members were advised that despite having received funding for the Coldbrook Catchment Flood Management Scheme, it was extremely unlikely that grant funding for the Llanmaes scheme would be forthcoming this year. The Director of Environmental and Economic Regeneration would be addressing this issue shortly in a Cabinet report on both the Coldbrook and Llanmaes Flooding Schemes shortly. Councillor G John requested that the Head of Service kept Llanmaes Community Council informed on the matter.

Vehicle Renewal Programme - expenditure on the budget was behind profile and the Head of Service advised that the original “All Wales Public Sector Framework Agreement for the Acquisition of Commercial Vehicles” had been replaced by the Yorkshire Purchasing Organisation although the arrangement had not formally been accepted by the All Wales Fleet and Transport Managers Group and Welsh Purchasing Consortium which had caused a delay in the purchasing of vehicles in the financial year 2011/12. Whilst every effort was being made to maximise expenditure on this budget, the Fleet Manager had advised that there could potentially be some underspend at the year end.

Appendix B to the report outlined the proposed 2012/13 Capital Programme. Members were advised that the bids would have to be evaluated for sustainable development under the headings:

living within environmental limits

ensuring a strong, healthy and just society

achieving a sustainable economy

promoting good governance.

Sustainability checklists would also be requested from Project Managers for each of the bids detailed. They would be reviewed by members of the Sustainable Development Working Group with a view to ensuring that wherever possible the four sustainable targets were addressed. The results would be included in the final Capital proposals report in February 2012.

The Budget Working Group had prioritised the bids based upon the recommendations of the Corporate Asset Management Group with the method of prioritisation as follows:

A

Health and Safety Legislation

B

Other Legislation / Statutory requirement

Ci

Economic Sense

Cii

Corporate Plan

Ciii

Sufficiency

D

Condition / Suitability

E

Welsh Government objectives

F

Low Priority

In considering the report reference was made to the Dingle Road Bridge with Members being informed that it was the intention to fund a replacement via the Section 106 agreement from Penarth Heights. Members also sought clarification on the criteria used to assess the need to refurbish children's play areas and were advised that the £100,000 detailed in the report referred to a generic fund for asset renewal which would be spent on a needs basis. An inventory of all play areas had also been undertaken and priorities had been identified. The Old Harbour revetment referred to at Appendix C related to general maintenance on the Harbour wall. With regard to the partnership agreement with leisure centres, the Director of Environmental and Economic Regeneration advised Members that the process had been delayed due to the slippage in the job evaluation process but discussions were ongoing regarding staff salaries and terms and conditions, etc. Tenders had also been received approximately six weeks previously and a consultancy firm were currently assessing the tenders with a view to a report being presented to Cabinet and the Scrutiny Committee following the evaluation process.

The Principal Regeneration Officer advised the Committee of some good news that had been received that day in relation to the Barry Island Footbridge in that £500,000 had been confirmed by the Department for Transport although clarification of the preferred contractor status needed to be ascertained in view of the fact the original tender had been submitted in 2009.

The Chairman referred to a fatality that had recently taken place on the road from Barry to Dinas Powys and suggested that the Cabinet be requested to consider the provision of a cycle path on this stretch of road on the grounds of health and safety. He suggested that the Cabinet could consider funding this provision from the Vehicle Renewal programme in view of the delay on the spend in that budget. The Chairman further suggested that the speed limit on the road should be reduced to 40mph in light of the recent fatality and other accidents that had taken place in the area.

In referring to Appendix B and the budget for substandard bridges the Chairman expressed his disappointment that Cross Common Road bridge had not been noted separately in the bids and that only £250,000 would be made available for bridge maintenance when he was aware that the cost for Cross Common bridge had previously been reported to be in the region of over £600,000 on its own.

Councillor Wilson referred to the bus lane at the Merrie Harrier junction Dinas Powys in that the traffic flow, bus lane and filtering arrangements were problematic and required further consideration.

(1) T H AT a pedestrian and cycle path route be provided on the stretch of road from Barry to Dinas Powys ie on the A4055 from Biglis roundabout to Southra Park Estate.

(2) T H A T a full options appraisal be undertaken on the A4055 from the Biglis roundabout through Dinas Powys to the Merrie Harrier junction.

Reasons for recommendations

(1) To establish a walking and cycling path urgently on health and safety grounds.

(2) In order that a full assessment of the areas can be undertaken.

674 INITIAL REVENUE BUDGET PROPOSALS 2012/13 (DEER) -

The reference from Cabinet of 16th November, 2011 and the report were considered jointly in view of the need to refer any comments to the Scrutiny Committee (Corporate Resources) and the Cabinet.

Appendix 1 to the report set out the necessary transfers to the original estimate for 2011/12 which were required to be made as follows:

Asset Rents, International Accounting Standard (IAS) 19, and Recharges etc - these related to accounting items and expenditure outside the control of Services. They reflected charges to Services for the use of capital assets, changes to inter service recharges, superannuation increases not required and adjustments in respect of pensions to comply with accounting standards.

Transfers – these reflected in the main transfers of functions and responsibilities between services ie the transfer of £1.869m from the Education and Schools (Strategy and Performance) budget to the E&ER Directorate (Planning and Transportation) budget to ensure budgets more accurately reflected accountability and delivery responsibilities for Mainstream Transport.

The following table compared the amended original budget with the projected outturn for 2011/12:

2011/12

2011/12

Variance

Amended

Original

Projected

(+)Favourable

Directorate/Service

Budget

Outturn

(-) Adverse

£’000

£’000

£’000

Environmental and Economic Regeneration

Planning and Transportation

4,928

4,982

(-)54

Economic Development and Leisure

7,028

7,394

(-)366

Visible Services

21,224

21,054

(+)170

Grand Total

33,180

33,430

(-)250

It was noted that for Planning and Transportation there was an adverse variance of £54k. due to increased supplies and services and premises costs of £76k. mainly due to the inclusion of Local Road Safety Grant expenditure within the estimates. Transport costs had also increased by £50k. primarily as a result of the increasing costs of providing home to school transport. The projected outturn for Economic Development and Leisure Department showed an adverse variance of £366k. which was mainly attributable to supplies and services and employees, including one off costs of £92k. that had been incurred as a result of the proposed Leisure Centre Partnership and transfer of Dyffryn Gardens to the National Trust. Visible Services showed a favourable variance of £170k. with the Head of Service also holding a budget for any pressures that may arise during the financial year. However, premises and repairs budgets were projected to overspend by £663k. being mainly attributable to the level of repairs required to the highway network as a consequence of the last two severe winters plus there had been an increase of 18% in Street Lighting energy costs for 2011/12. A total of £380k. of reserves was to be used to help fund the increased cost of repairing the highway and the increased cost of street lighting energy.

In considering the report Members commented on the need to be more efficient and effective in relation to street lighting and the use of LED lights. With regard to school transport, the Director advised that the bulk of the spend related to the Councils statutory duty with the cost of providing a bus service increasing, particularly in view of increasing fuel costs.

Cost pressures were also highlighted in relation to the Barry and Cowbridge Markets and officers were due to meet with representatives to discuss the issue further.

Members also raised concerns in relation to the Councils responsibility in relation to the Coast and cliff erosion. The Director advised that a coastal management plan had been developed which identified various issues and the Department was currently discussing in detail with landowners the steps that could be taken to deal with the issue. .

Although expressing their concern regarding the cost pressures, Members

RECOMMENDED - T H A T the amended budget as set out at Appendix 1 to the report be noted.

Cabinet had, on 16th November 2011, referred the report to the Scrutiny Committee to engage in the consultation process. Cabinet approval had been sought for the introduction of the draft Supplementary Planning Guidance on Upper Holton Road Development Guidelines so that it may be published for consultation purposes. The Supplementary Planning Guidance (SPG) was attached as an appendix to the report with the Principal Regeneration Officer advising that the SPG sought to establish specific design guidance for the future development of the Upper Holton Road local centre, as well as influencing the pattern of land uses within the area. The draft SPG was one of three initiatives that sought to address issues that had been identified within the Upper Holton Road, Barry. The other initiatives were noted as Houses in Multiple Occupation Licensing Scheme and changes to the Vale of Glamorgan Council Housing Renewal Area Policy 2010-2013. It was anticipated that these three initiatives, if adopted, could provide a clear direction that would assist with the future process of management, change and improvement for the area.

The general composition of the SPG document was as follows:

Background

Purpose of the Guidance

Existing national and Local Policy Guidance

Identification of Core Retail Area

Shop Front Design Guidance

Advertisement Design Guidance

Design Guidance for the Conversion of Commercial Premises to Residential

Information on the need for necessary consents

Appendices (containing map of area to which guidance relates and background information).

The officer also tabled a coloured copy of the map detailed within the appendices which clarified for Members’ the specific areas concerned. In presenting the report the officer also stressed that it should be recognised that various interested parties, businesses, traders and organisations, would have the opportunity to respond to the content of the document and it was anticipated that once the consultation exercise had been undertaken the report would be presented to Cabinet to set out the views obtained and the way forward in response to the views expressed.

The Principal Regeneration Officer also informed Committee that it was the intention to commence the consultation exercise week commencing 19th December and conclude at the end of February 2012. All landlords and businesses in the red boundary area detailed in the map would be written to and invited to attend drop in sessions or if requested, attend face to face meetings with officers, a newsletter would also be distributed to the Castleland Renewal Area and the proposals would be conveyed via social media and the website etc.

Having considered the report it was

RECOMMENDED - T H A T the resolutions of Cabinet be accepted.

Reason for recommendation

In light of the consultation process that would be undertaken.

676 PROSIECT GWYRDD MINUTES: 22ND JULY AND 7TH OCTOBER 2011 -

The following minutes of the Prosiect Gwyrdd Joint Scrutiny Panel were presented for Members’ information:

Apologies for absence were received from Councillors M.G. Parker and D.V. Poole (Caerphilly County Borough Council) and B. Bright (Newport City Council).

2. DECLARATIONS OF INTEREST

There were no declarations of interest received at the commencement or during the course of the meeting.

3. MINUTES - 11TH MARCH 2011

It was agreed that the minutes of the meeting held on 11th March 2011 be approved as a correct record.

Matter Arising

Site visits to Facilities

The Project Director advised that the request of the Panel that the Joint Committee consider and approve visits by the members of the Panel to the facilities operated by the final two shortlisted bidders would be considered in the autumn.

EXEMPT MATTER

It was accepted that in this instance the presentation and subsequent discussions would contain exempt information and that there would be other occasions when it would be necessary to exclude the press and public. However, it was intended that where possible reports would be considered in the open part of the meeting to enable the public to be present.

Members considered the public interest test certificate from the Proper Officer and concluded that on balance the public interest in maintaining the exemption outweighed the public interest in disclosing the information and it was

RESOLVED that in accordance with Section 100A(4) of the Local Government Act 1972 the public be excluded from the remainder of the meeting because of the likely disclosure to them of exempt information as identified in paragraph 19 of Part 4 of Schedule 12A of the Local Government Act 1972.

PROSIECT GWRYDD PRESENTATION

Mr. M. Williams (Project Director) gave a presentation which highlighted the commercial sensitivity of the project, the role of scrutiny, the overall timeline, the current bids, risks and issues associated with the project, the overall timeline, the joint working agreement, communications and engagement and the themes of the work programme.

To put the project into context he advised that the outline business case defines its scope as a 25 year contact involving the design, build, finance, operation and maintenance of the facility for circa 35% of the total municipal waste stream from the five authorities (with each also striving to achieve the 70% recycling and compost target set by the Welsh Government). He advised of the aims of the procurement of a long-term contract for the treatment/disposal of residual municipal waste and detailed the value for money of economies of scale of the shared procurement costs (supported by the Welsh Government) which will provide a solution that reduces the reliance on landfill to a minimum.

The process aims to seek to deliver the best environmental, cost effective and practical solution to municipal residual waste that is left over in each authority after recycling and composting has been maximised in each area.

Commercial Sensitivity

Reference was made to the commercial sensitivity of the project and the need for the Panel to determine as to whether, in view of potentially confidential information that may be disclosed, the public should be excluded from its meetings. As discussed earlier in the meeting it was accepted that there would be occasions when it would be necessary to exclude the public but that where possible reports would be considered when they are present.

A query was also raised as to whether the nominated representatives would be able to divulge information to their colleagues and it was confirmed that confidential information received during the course of the meeting should not be discussed although the minutes of the meeting (excluding such confidential details) are a public document. Detailed information is also available on the Prosiect Gwyrdd web site.

Role of Scrutiny

Reference was then made to the governance structure and it was noted that the partnership is governed by a decision making Joint Committee, consisting of two Councillors from each Cabinet/Executive from each authority. The Joint Committee also governs the project through the 'Competitive Dialogue' process and the final decision to appoint a contractor will be made by each Council. The Project Board (with senior advisors from each authority) advises the Joint Committee with the assistance of the Project Team and external advisors. The role of the Joint Scrutiny Committee is to scrutinise the decision making process. However, there are three key decisions that must be made by each individual Partner Council - entering into the partnership, the appointment of a preferred bidder and the final contract award.

Overall Timeline

Reference was made to the timeline for the procurement process (invitation, prequalification, outline solutions, detailed solutions, final tender, preferred bidder) and it was noted that all bids will be assessed against agreed criteria, involving environmental impacts, sustainability, service delivery, cost and value for money. The Partnership is technology neutral and will look at all technologies that may be proposed for the contract, although technology was not prescriptive at the initial invitation stage.

Those who were successful at the pre qualification questionnaire stage (where their bids were evaluated in accordance with the pre-set evaluation criteria for the Project) had been invited to submit outline solutions for the Project, in line with the Procurement Plan. Prosiect Gwyrdd is currently in the middle of the competitive dialogue process at the detailed solutions stages with three separate bidders (there were four but one has subsequently withdrawn). Each is proposing an energy from waste facility. Covanta Energy Ltd is proposing a merchant energy from waste facility located at Brig y Cwm, Merthyr Tydfil, Veolia ES Aurora Ltd an energy recovery facility located at Bowlease Common, Newport and Viridor Waste Management Ltd a merchant energy from waste with combined heat and power facility located at Trident Park, Cardiff.

This stage of the competitive dialogue process requires shortlisted participants to further refine their outline solutions and intimately submit a detailed submission of their solutions.

Following this detailed stage of the procurement, Prosiect Gwyrdd has reserved the right to include a ‘refined solution’ stage, if required, for clarification and further discussions with Participants. Following this stage the successful Participants will be invited to submit a final tender.

It is anticipated that two participants will remain at that stage with the preferred bidder being appointed in August with the contract being finalised by the end of the year.

A query was raised on the number of proposals/technologies submitted and it was noted that the project is technology neutral and the procurement stance was to set out the requirements through a specification and evaluation stage. This was presented to the market with an invitation to submit proposals that best meet those needs. It was explained that the pre qualification stage was evaluated in accordance with the pre-set evaluation criteria for the Project and the eight highest scoring Companies were invited to submit outline solutions for the Project, in line with the procurement. Those that did not score high enough were deselected and two submissions were non-compliant. At the ISOS stage, the Project received five outline solutions (from four companies) and four solutions (from four companies) which were taken through to the detailed stage (invitation to submit detailed solutions). One Solution has subsequently withdrawn.

It was raised as to whether, as there are now only three companies, it would be possible to invite another company to participate. It was confirmed that under procurement rules it is not possible to invite a new company.

Action - It was agreed that a presentation on the selection process be presented at the next meeting.

Risks and Issues

Reference was then made to the risks and issues associated with the project and it was noted that waste flow calculations are critical to the success of the Project and that information is made up of each of the partner’s assumptions and predictions over the contract term. This will be a critical area for the Joint Scrutiny Panel to scrutinise.

During the course of the debate reference was made to the tonnage associated with the bids and the subsequent gate fees arising therefrom. It was noted that such detail has not yet been submitted and it would be necessary to calculate the fees once the information is forthcoming.

The Project has identified that a fundamental risk to any waste procurement project is the availability of a suitability site with full planning permission. It was noted that such procurements do not usually envisage planning permission to be received by financial close. However one participant has already received planning permission, another is under consideration and a third is due to be submitted in the near future.

Mr. Williams also outlined the health and environment issues, partner affordability and delivery of value for money and advised that there is also a requirement for the individual Councils to buy in and sign off the project. With regards to health and the environment, he advised that any subsequent changes in legislation would need to be adhered to by the successful contractor, through a ‘change in law clause’ in the contract.

Joint Working Agreement

The Panel were reminded that Prosiect Gwyrdd cannot contract directly with the successful bidder and a lead authority needs to be selected for this purpose and that the joint working agreement is currently under review in order to achieve this.

Reference was made to the existing joint working agreement which sets out the governance arrangements for the duration of the procurement process that has been signed by each of the participating authorities and to the contractual rights and obligations detailed within that document. It was confirmed that the decision as to award of contract will be a matter for each authority, though it was noted that the agreement contains provision that if the proposed solution meets the output requirements and is within the affordability envelope then any partner authority that fails to confirm the appointment of the Preferred Bidder shall be deemed to have withdrawn from the process and could potentially be required to compensate the remaining authorities subject to a liability cap of £3m.

Action- details of the existing joint working arrangement, and, in the event that not all partner authorities buy in and sign up to the project the implications arising therefrom, be presented to the next meeting.

During the course of the debate reference was made to the elections in May 2012 and the potential for changes in political administration. In noting that the tenders would be invited by that time but that the final report would not be considered by the partner authorities until the Autumn it was agreed that it would be necessary to ensure that seminars specific to Prosiect Gwyrdd are incorporated within the Member induction programme so that they are fully aware of the context and required outcome of the Project when they consider the final report.

Actions

1. Seminars on Prosiect Gwyrdd to be incorporated within the Members induction programme

It was accepted that at the commencement of the Project it had been recognised that there was a requirement to undertake comprehensive stakeholder/community group engagement and this was achieved through the approved communications strategyand a number of established consultative mechanisms. Further events have been scheduled.

As raised earlier in the meeting the complexity of the commercially sensitive project and the prescriptive procurement process was seen as an issue for engagement. Members reiterated that there had been a perceived lack of transparency and much concern has been raised over the proposed technology and strong public opposition has been received to the proposed sites (Cardiff, Newport and Merthyr).

It was confirmed that the decision on the preferred bidder requires the approval from Council of each of the five partners and that any views express would need to be taken into consideration at that time in order that an informed decision can be taken.

It was accepted that there is a risk to the project if it is not signed off by the respective Councils and implications for those partners as detailed in the Joint Working Agreement (and discussed earlier in the meeting). There would be a need to identify an alternative waste solution with a new procurement process, there would be prolonged exposure to both landfill costs and recycling fines and the loss of Welsh Government grant and the procurement costs.

Action - minutes of the Prosiect Gwyrdd Joint Committee to be presented to the Panel

Mr. Williams responded to a number of questions raised over and above those which were considered during the course of the presentation and in particular to the matrix scoring for those companies that originally expressed an interest. Reference was made to the methodology of how the criteria was applied and the subsequent matrix scores and whether they were available to be viewed. It was confirmed that the information has not been released. Mr. Williams explained how the approved process had been implemented at pre qualification stage which had resulted in four being invited to participate in the next stage and reiterated that eight of the highest scoring companies were invited to submit outline solutions for the project and those that did not score high enough were deselected and two submissions were non-compliant.

It was suggested that in view of the amount of queries received from the public such information should be made available in order that the process can be seen to be transparent and there is an explanation as to how a company had either progressed to the next stage or had been disregarded. In noting that many enquires relate specifically to technology, it was confirmed that thepre qualification stage did not evaluate technology.

Action- presentation to be made to the next meeting detailing the selection process, and, if possible, information on the specific matrix scores.

The Project Team were thanked for their informative presentation and responding to questions and issues raised by members.

Action -copy of the presentation, with any confidential information redacted, to be sent to the Panel.

Correspondence received from Councillor B. Bright (Cardiff City Council)

The Panel were circulated with a copy of a statement received from Councillor B. Bright, Newport City Council, which advised that its Labour Group is vehemently opposed to any of the waste incineration options on the current Prosiect Gwyrdd shortlist, and particularly to the one at Bowlease Common. It also raised a number of questions to which he requested a response.

Action- It was agreed that responses to the queries would be collated and sent to Councillor Bright. A copy of the response would be copied to the Panel.

Correspondence received from Rod Walters

The Panel were circulated with a copy of an email from Rod Walters seeking responses to a number of questions that he raised.

Action - It was agreed that responses to the queries would be collated and sent to Mr. Walters and that copy of the response would be copied to the Panel.

There were no declarations of interest received at the commencement or during the course of the meeting.

3. MINUTES - 22nd JULY 2011

It was agreed that the minutes of the meeting held on 22ND July 2011 be approved as a correct record.

4. EXEMPT MATTER

Members considered the public interest test certificate from the Proper Officer and concluded that on balance the public interest in maintaining the exemption outweighed the public interest in disclosing the information and it was

RESOLVED that in accordance with Section 100A(4) of the Local Government Act 1972 the public be excluded from the remainder of the meeting because of the likely disclosure to them of exempt information as identified in paragraph 14 of Part 4 of Schedule 12A of the Local Government Act 1972.

PRESENTATION SHORTLISTING PROCESS

Mr M Williams (Prosiect Gwyrdd) gave a presentation to explain the shortlisting process. At the previous meeting there was debate on the procurement process and how it arose that all three final bids are all energy from waste (EfW) proposals.

Pre-Qualification Questionnaire

Mr Williams explained the procurement process started with the initial invitations to potential interested parties. The Pre-Qualification Questionnaire (PQQ) followed this and ensured that only those financially and technically able to provide the service would go forward to the next stage. In order to evaluate the PQQ’s an evaluation matrix was devised and consisted of 12 criterions that included, general company information, eligibility (legally entitled to participate), technical capacity and ability, environmental and quality management and financial and economic standing. In total 47 interested parties expressed initial interest and 36 downloaded the PQQ. There were 14 PQQ’ s returned and of these 2 were immediately rejected because they did not meet the criteria and a further 2 were rejected when they failed to complete the eligibility and certification form. This left ten potential bidders with the top 8 were taken through to the next stage.

Competitive Dialogue

The commencement of competitive dialogue started in May 2010 with the aim to find the most economically advantageous tender that best meets the Partnership requirements and is in line with EU procurement rules. The Invitation to Submit and Outline Solution (ISOS) asked the top 8 to submit outline solutions. The Project Board and the Joint Committee approved the methodology for the ISOS, which gave each bidder the opportunity to submit 2 solutions, which were not limited in terms of the type of solution. The aim was to select the four highest scoring solutions. This resulted in four bidders submitting five solutions; all five were EfW, with one bidder submitting two EfW at two different sites. The lowest scoring solution was de-selected.

Four companies were invited to the ‘Invitation to Submit a Detailed Solution’ (ISDS) stage and in March 2011 one company withdrew its submission. The remaining companies are at different stages of the planning process.

Energy From Waste

Mr Williams outlined the background to the final bidders all submitting EfW solutions. He stated that in England the majority of solutions have been EfW. There have been 42 residual waste projects in England and 29 are EfW. There were 8 Mechanical Biological Treatment (MBT) to fuel solutions, however the fuel output has either gone into EfW, Gasification or been exported to Europe. A further 4 are also MBT but with a landfill output, the result is compost like output that has a limited use that cannot be used on land for food production or animal grazing. There was 1 autoclave solution, which involves the steam cleaning under pressure of the residual waste, the process can vary but there is no sustainable market for the output. The result is a product that cannot go to landfill because it is still organic, and will most likely go to a Gasifier or EfW.

Evidence if Bias

Mr Williams looked at the procurement process to see if there was any evidence of bias towards an EfW solution. He stated that there was a Stakeholder (Member) Evaluation workshop in September 2009, and a Scrutiny Workshop on the evaluation methodology in December 2009. The technology neutrality was tested with the Joint Committee in January 2010 when they were asked if they saw any bias towards EfW. In February 2010 the technical advisors were also asked if they was any bias towards EfW and they confirmed there was none.

Mr Williams stated that he could see no real bias in the procurement process however there may have been some influence towards EfW from the following:

Reference Project

Mr Williams stated that the outline business case (OBC) required a reference project to be developed. This allows a financial assessment to be carried out. The reference project chosen was EfW and it is possible that the market may have interpreted that this was what was required. Councillors asked why EfW was chosen and it was explained that various technologies were assessed against a number of criteria and it was not intended to be a signal to the market. The Project Board and individual local authorities approved the reference project and Welsh Government (WG) approved the Business Case. It was widely communicated that the reference project was only a model for the business case and the project was open to any technology that met the Partnership’s published requirements.

Landfill Diversion Authority Requirement

Mr Williams stated that because of this existing requirement upon local authorities any solution from bidders that offered a landfill option would not do well. This would impact negatively upon any MBT solutions that have a landfill output.

Extra Recycling Authority Requirement

This requirement would normally favour alternative technologies, however WG have allowed bottom ash as ‘recycling’, which may neutralise this benefit or in some cases favour EfW technologies.

Most Economically Advantageous Tender

This is defined by the evaluation criteria and has a cost element. EfW is often less expensive.

Alternative Technologies

Alternative technology solutions have been prominent in local authority waste projects when local authorities have communicated anti-incinerator policies to the market. But in situations where there is no such policy EFW will often be successful.

Members suggested that technological solutions that have moved on since the procurement process commenced and health considerations should have a higher weighting. It was proposed that in view of the withdrawal of one of the final 4 bidders that consideration is given to allowing an alternative newer technology to take the place on a ‘wildcard’ basis. Mr Williams stated that all technologies have some element of burn of the end product.

Mr Williams discussed reasons why alternative technologies could not be sought and introduced at this stage of the procurement process. He stated that fundamental principles of procurement require equal treatment, transparency and non-discrimination. If the Partners wanted to seek alternative technologies at this stage the procurement process would have to stop and start again from the beginning.

5. GATE FEE MODEL AND GAIN SHARE

Mr M Falconer (Prosiect Gwyrdd) gave a presentation to outline a generic financial model for the successful contractor over the facility operating period. The model covers Cost, Income and Contractors Profits. The typical costs include repayment of debt incurred in building the facility at 45% and operational costs at 55%. Income includes the Prosiect Gwyrdd (PG) gate fee that covers a guaranteed minimum payment. It would also include third party waste, from other local authority gate fees and commercial and industrial gate fees, as well as electricity /energy income from treating both sources of waste.

Members asked if there is a restriction preventing the successful bidder from offering lower gate fees to other customers. Mr Falconer stated that this issue in relation to Other Local Authority Gate fees had been discussed in dialogue with a favourable response although the exact details had not yet been agreed. Restrictions on other Third Party gate fees may inhibit the bidders commercial flexibility and may not be a valid comparison when factors such as different contract lengths, Welsh Government grant, etc are considered.

The bidders are all proposing plants with capacity in excess of PG requirements, with capacity varying from 256,000 to 750,000 tonnes per annum. In these cases Third Party Income and Electricity Income are much more significant then if the facility was sized for Prosiect Gwyrdd needs.

The gate fee is set on the basis of the contractor’s model, which assumes the plant will operate to capacity. They will also make an assessment of the availability of third party tonnage, the market rate for commercial and industrial waste (C&I) and other municipal solid waste (MSW). The electricity income is another factor in their modelling and PG waste fills the gap to achieve the contractors target rate of return.

Risks

The risks to the project were outlined in that the Contractor will bear the risk of any shortfall in third party income both from reduced tonnage and from reductions in expected gate fee. PG would take the risk of not meeting its guaranteed minimum tonnage (GMT). Members discussed the risks should a contractor fail and go bankrupt. Mr Williams stated that termination provisions are set out in the contract and in some cases PG can step in to run the plant.

Pro-rata

The pro-rata concept was explained in that PG would only pay for its share of the facility for any ‘oversized’ facility. Members asked how the figures are calculated and it was explained that the normal approach is to apportion based on PG tonnage relative to the total capacity of the facility.

6. FORWARD WORK PROGRAMME

Mr J Jones stated that he had liaised with Mr Mike Williams (PG) to develop a draft forward work programme that is linked to the key deliverables of the PG project. It is proposed that meetings are arranged as follows:

November 2011 - The joint working agreement

December 2011 – Shortlisting of final 2 bidders.

January 2012 – call for evidence invitation to key stakeholders.

(Date to be determined) – to consider final joint working agreement.

It was agreed that there should be careful consideration of the key stakeholders to be invited to the meeting in January 2012. Suggestions included an Expert Witness who has received peer validation of their work, Friends of the Earth, Welsh Chief Medical Officer, the Environment Agency and an Industry Representative (to give a balanced view). It was agreed to discuss this at the next meeting.

Action: Agenda for next meeting to include stakeholders to be invited for January 2012 meeting.

Mr Jones asked Members to consider changing the day of future meetings, as Fridays are difficult for the PG Legal Officer. It was agreed to change the day to Monday afternoons, Mr Jones to change the dates suggested in the forward work programme accordingly.

Action:Dates for future meeting to be amended.

7. MEMBER ENGAGEMENT

Mr Mike Williams (PG) stated that PG Project Team are keen to obtain feedback from Members and asked for suggestions on how future awareness raising could take place. Members suggested attending Council meetings at local authorities and writing to group leaders and including information in induction pack for Members after the May 2012 elections. Given the importance of this issue, it was suggested that a further session on member engagement be held at a future meeting.

8. TO RECEIVE AND NOTE THE INFORMATION ITEMS

The minutes of the Project Gwyrdd Joint Committee held on 21 March 2011 and 18 July 2011 were noted.

9. ANY OTHER BUSINESS

Mr Mike Williams stated that at the last meeting of the Joint Committee the issue of site visits by the Joint Scrutiny Panel was discussed. The Joint Committee did not feel it was their role to say yes or no and the joint scrutiny panel should decide.

Meeting closed at 12:48pm.

--------------

During consideration of the minutes Members reiterated their request for an update on the recent new recycling arrangements that had been put in place and also for an update on recycling incentives. A number of Members also requested that consideration be given as to how recycling facilities can be addressed at premises of multiple occupancy e.g. blocks of flats and that both the Housing and Planning departments be reminded of the need to address waste management issues when considering applications / issues in their service areas.

It was subsequently

RECOMMENDED - T H A T the minutes of the Prosiect Gwyrdd Joint Scrutiny Panel be noted and that further reports as detailed above be presented to the Scrutiny Committee in due course.

Reason for recommendation

In order that Members can consider the progress being made in relation to the current recycling regime and other initiatives.